Question

Which one of the following is an economic, but not an accounting, cost? Interest paid on a loan The wages a business owner could have received from a full-time job elsewhere O Taxes The cost of paper The wages paid to a part-time employee

Answer 1

a) "B"

the wages business owner could have received from a full time job is an economic cost.

b) "B"

This is an example of the diminishing marginal return because as the firm is planting more the return i.e. the output are decreasing in proportion to the input.

c) "B"

A local bakery hiring a new firm is an example of short run change.